The Economist - USA (2021-02-06)

TheEconomistFebruary 6th 2021 41

1

I

n certain countries, when the politi-

cians are considered to have failed, it is

time for an unsmiling general to appear on

television to announce he has seized pow-

er. In Italy, the procedure is more benign: a

man in a well-cut suit, usually one with a

successful career as a central banker be-

hind him, is called to the presidential pal-

ace to get the nod.

On February 3rd just such a man, Mario

Draghi, arrived at the palace on the Quiri-

nal hill to be asked by the president, Sergio

Mattarella, to head a new government. Mr

Draghi accepted, conditional on the sup-

port of a parliamentary majority. Mr Matta-

rella called in the former boss of the Euro-

pean Central Bank after Matteo Renzi’s

Italia Viva group torpedoed hopes of a deal

between the parties that had supported the

outgoing prime minister, Giuseppe Conte,

and his left-leaning coalition.

Markets rejoiced. The Milan bourse

leapt nearly 3% at the opening. The yield

gap between Italian and German govern-

ment bonds, which widens as doubts grow

about Italy’s ability to repay its vast debts,

shrank by 8% to just over 100 basis points.

The reaction was understandable. As Mr

Draghi noted, with bankerly understate-

ment, Italy faces a difficult moment. Not

only is it in the midst of a pandemic; in

March, a ban on firings is due to be lifted,

unleashing a wave of job losses. And by the

end of April, the government has to agree

on how to spend more than €200bn

($240bn, or 4.3% of gdp) in grants and

loans from the eu’s recovery fund; the

grants alone are more than half what in real

terms it got from the Marshall Plan after the

second world war. Other member states

want it to use the money in a way that re-

verses two decades of dismally low growth

that has threatened the stability of the eu’s

single currency. Few are better equipped to

tackle the economic challenge than “Super

Mario”, the man whose decisive action

saved the euro in 2012.

The outcome of the crisis that erupted

when Mr Conte resigned on January 26th

represents a triumph for Mr Renzi, himself

a former prime minister. He has brought

down a coalition whose policies, including

its plans for the allocation of the eu’s

funds, he increasingly deplored. He has

unseated a popular prime minister who

threatened to challenge him in the middle

ground of politics. And both outcomes

have been achieved without an election

that could have destroyed Mr Renzi’s tiny

party. Italia Viva had enough seats in par-

liament to have been crucial to Mr Conte’s

majority, but polls suggest it now has the

support of less than 3% of the electorate.

Mr Renzi’s victory was scarcely a win for

Italian democracy, however. Something is

wrong in a country where a party as tiny as

his can oust a government, let alone one

that has had as frequent recourse as Italy in

the past 30 years to political outsiders.

The first was Carlo Azeglio Ciampi—like

Italy

Send in the technocrats, again

ROME

Mario Draghi is summoned to form a government

Who needs politicians?

Italy,primeministers,1993-2021

Source:TheEconomist *Notyetconfirmedbyparliament

Politician

Technocrat

1993 2000 21151005

Mario Draghi*

Giuseppe Conte

Paolo Gentiloni

Matteo Renzi

Enrico Letta

Mario Monti

Giuliano Amato

Massimo D’Alema

Romano Prodi

Lamberto Dini

Silvio Berlusconi

Carlo Azeglio Ciampi (Republic’s first technocratic PM)

Europe

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43 NordStream2 limpson

43 Sweden’slonelyfilmfestival

44 Charlemagne: The vaccines

blame game

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